1. Carolina Oil Company produces cooking oil and sells them to restaurants for $10 per 5-Gallon Oil container. In 2010, they produced 100,000 containers and sold 90,000 containers. The company had no inventory at the beginning of the year. The company has the following cost structure:

a)(5 points)What is the manufacturing unit cost under absorption costing?

b)(5 points)What is the manufacturing unit cost under variable costing?

c)(5 points)Calculate the Contribution Margin per unit?

d)(5 points)How much is the Conversion Cost per unit?

2. QB Corp has the following monthly flexible overhead budget:

The companys activities in April is described as follows:

Machine Hours: 9,000

Production Runs: 7

a)(12 points)Determine the flexible budgeted cost for the following

1. Indirect Material
2. Indirect Labor
3. Quality Assurance

b)(8 points)The actual setup cost was $1,200. Compute the variance for setup during April using activity based flexible budget. Indicate if the variance is favorable or unfavorable.

3) BoardCo has established the following standards for the prime costs of one unit of its chief product, chessboards.

During June, JetCo purchased 125,000 pounds of direct material at a total cost of $225,000. The total direct labor wages were $40,000. JetCo produced 10,000 chessboards during June, using 110,000 pounds of direct material and 4,000 direct-labor hours.

Compute the following variances for June, and indicate whether each is favorable or unfavorable.

a)(5 points)Direct Material Price Variance

b)(5 points)Direct Material Quantity Variance

c)(5 points)Direct Labor Rate Variance

d)(5 points)Direct Labor Efficiency Variance